Households already face 13% rise

Council tax bills are reportedly set to rise by �80 per household over the next two years.

Any increase will come on top of a recent average council tax rise of 13% across England and Wales, according to Treasury estimates uncovered by the Liberal Democrats.

In last month's budget, the Treasury estimated local authorities needed to raise an extra �2.2bn over the period 2004 to 2006.

The Lib Dems have accused Chancellor Gordon Brown of using the increases as an "unfair" stealth tax to boost spending on public services.

'Tough action'

The Treasury has said local authorities that raise taxes unnecessarily could face "tough action."

According to the figures, the bulk of the increase will fall on taxpayers during 2005-06, when an estimated �1.4bn will be needed to be raised.

Clobbering the poor, especially the elderly, with the unfair council tax is a shoddy way of passing the bill for public service investment onto those who can least afford it Matthew Taylor, Liberal Democrats

In addition, according to the Office of National Statistics (ONS), the heaviest burden of this years council tax increase will fall on pensioners.

The ONS concludes that pensioner households spend on average 5.6% of their income on council tax - compared to 2.6% for non-pensioner households.

Pensioner households often enjoy money off their bills but this is outweighed by smaller average incomes.

'Just the beginning'

Commenting on the figures, Liberal Democrat treasury spokesman Matthew Taylor said this year's Council Tax rises "appear to be just the beginning".

"Clobbering the poor, especially the elderly, with the unfair council tax is a shoddy way of passing the bill for public service investment onto those who can least afford it.

"After 6 years of Labour, no action has been taken to address Council Tax inequality.

"It is high time local taxes were based on the ability to pay just like national income taxes," he said.

In response, the Treasury said that the level of central funding given to local authorities had increased by 25% since 1997.

A Treasury spokesperson told BBC News Online that council tax was not being used to support ambitious central government spending as it was set locally and the projections on future rises "are based on historical data".